Auditing and assurance services solutions manual free download

Always check both your Spam and Junk mail if you did not see incoming emails in your inbox. We provide free samples for any required Textbook solution or test bank to check and evaluate before making the final purchase for customer satisfaction. By visiting our site, you agree to our privacy policy regarding cookies, tracking statistics, etc. Read more. Accept X. If you require any further information, let me know. Would it be possible that the management team would present unreliable financial statements to the bank in order to get a desperation loan?

Because of this possibility, a financial statement audit is needed to add credibility to the financial statements. Incorrect According to Section of the Sarbanes-Oxley Act, internal audit services are prohibited. Correct Sarbanes-Oxley prohibits the provision of all of the services listed in answers a, b, and c; therefore, d all of the above is the best response.

Incorrect Financial statement auditors do not reduce business risk. Correct After completing a financial statement audit, information risk has been reduced for investors. Incorrect Complexity creates demand for accounting services but is not an objective of the financial statement audit.

Incorrect Auditors do not directly control the timeliness of financial statements. Management must first provide the information to be audited. Incorrect A financial statement opinion is the objective of a financial statement audit, not a compliance audit. Incorrect A basis for a report on internal control is the objective of an internal control audit under Section of the Sarbanes-Oxley Act, not a compliance audit.

Incorrect A study of effective and efficient resources is the objective of an operational audit, not a compliance audit. Incorrect While successful completion of the Uniform CPA is necessary to be licensed as a CPA, a candidate also requires the proper experience and proper education.

Thus, letter d. Incorrect While proper experience is necessary to be licensed as a CPA, a candidate also requires the successful completion of the Uniform CPA and proper education. Incorrect While proper education is necessary to be licensed as a CPA, a candidate also requires the successful completion of the Uniform CPA and proper experience. This is the responsibility of the GAO. Incorrect The CIA is not responsible for monitoring the use of public funds by public officials.

Incorrect The SEC is not responsible for monitoring the use of public funds by public officials. Correct The mission of the U. Government Accountability Office is to ensure that public officials are using public funds efficiently, effectively, and economically.

Incorrect A financial audit is typically not included as part of a performance audit. Incorrect A compliance audit is typically not included as part of a performance audit.

Incorrect A review of credit ratings of customers would not provide evidence about the completeness of accounts receivable. Because GAAP requires the accounts receivable balance to be valued at the amount expected to be collected from customers, the review of credit ratings relates to valuation. Incorrect A review of credit ratings of customers would not provide evidence about the existence of accounts receivable.

Incorrect A review of credit ratings of customers would not provide evidence about the rights of accounts receivable. Incorrect A review of credit ratings of customers would not provide evidence about the occurrence of accounts receivable. However, to be considered as sufficient to conclude that all expenses have been recorded, they will need corroboration with documentary evidence.

Thus, this is the correct response. Incorrect Although there is a high level of risk associated with client acceptance, this phrase was created by the authors. Correct By definition, information risk is the probability that the information circulated by a company will be false or misleading. Incorrect Moral hazard is the risk that the existence of a contract will change the behavior of one or both parties to the contract.

Incorrect Business risk is the probability an entity will fail to meet its strategic objectives. Correct This is clearly a test of the completeness as the assertion always includes any issues of transaction cutoff, which means that the recording of all revenue, expense, and other transactions must be included in the proper period in accordance with GAAP.

Incorrect This is not an existence test. This is clearly a test of the completeness as the assertion always includes any issues of transaction cutoff, which means that the recording of all revenue, expense, and other transactions must be included in the proper period in accordance with GAAP. Incorrect This is not a test of valuation. Incorrect This is not a test of rights and obligations. Incorrect This is not an occurrence test. Incorrect This is not a completeness test.

This is clearly a test related to rights and obligations as the question that must be answered with evidence is to establish that amounts reported as assets of the company represent true assets that it really does own and that the amounts reported as liabilities truly represent its obligations.

Thus, there is a risk that the company is recording assets that they do not own on their balance sheet. Goods on consignment, by definition, are not owned by the company.

Correct This is clearly a test related to rights and obligations as the question that must be answered with evidence is to establish that amounts reported as assets of the company represent true assets that it really does own and that the amounts reported as liabilities truly represent its obligations.

Incorrect This is not a test of completeness. If an addition to the equipment account cannot be located or identified as adding value to the equipment balance, it is possible that the amount should have been classified as repair and maintenance expenses under GAAP. Correct This is a test of existence.

Incorrect This is not a test of occurrence. Incorrect Under Sarbanes-Oxley, public accounting firms are prevented from acting in a managerial decision-making role for an audit client. Correct Sarbanes-Oxley prevents public accounting firms from serving an audit client in any of the preceding listed roles. As a result, each of the responses a, b, and c is incorrect and letter d is the correct response. Incorrect Substantial equivalency does not refer to the financial statement auditing process.

Incorrect Substantial equivalency does not refer to consulting services. Incorrect Substantial equivalency does not refer to other professional organizations. Under the concept of substantial equivalency, as long as the licensing home state requires 1 hours of education, 2 successful completion of the CPA exam, and 3 one year of experience, a CPA can practice either in person or electronically in another substantial equivalency state without having to obtain a license in that state.

Correct Auditing is a subset of attestation engagements that focuses on the certification of financial statements. Incorrect That is not true. Auditing is one example of an attest engagement. The level of assurance provided is not lower for an attestation engagement. The auditor is not allowed to provide management support for its audit clients.

Rather, consulting engagements can focus on providing clients with advice and decision support. Incorrect The definition provided is the one for assurance engagements, which is quite broad and includes all engagements that are designed to improve the quality of information, or its context, for decision makers.

Correct Management is more likely to overstate assets and understate liabilities. As a result, when auditing an asset balance, the most relevant assertions are likely to be either existence or valuation. In this situation, because of the nature of cash and the fact that is no foreign currency translation calculation, the existence assertion is clearly the most important assertion. Incorrect Although rights and obligations is an important assertion, it is not the most relevant assertion for the cash balance.

Since management is more likely to overstate assets, when auditing an asset balance, the most relevant assertions are likely to be either existence or valuation. Incorrect Although valuation is an important assertion, it is not the most relevant assertion for the cash balance. If however, there was a foreign currency translation adjustment, valuation of cash would also be relevant.

Incorrect Although occurrence is an important assertion, it is not the most relevant assertion for any balance sheet account. Rather, the occurrence assertion is more closely related to income statement accounts because the question that needs to be answered with evidence is whether the transaction really did occur in accordance with GAAP. However, this evidence would not help to value the investment in accordance with GAAP.

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